platinum

South Africa’s second-largest platinum mining company has initiated a process that may lead to 2 500 staff reductions at its lossmaking Impala Rustenburg operation, where financial sustainability has deteriorated significantly in recent years.

The Johannesburg Stock Exchange-listed Impala Platinum(Implats) said on Monday that it had issued a notice to relevant employee representative groups, government authorities and other stakeholders of its initiation of a Section 189 consultation process in terms of the Labour Relations Act, aimed specifically at ensuring the sustainability of the Impala operations, which currently employ some 31 000 people.

The company, headed by CEO Nico Muller, is experiencing severe financial pressures largely as a result of persistently low metal prices in rands and continued production cost increases.

At the same time, Impala Rustenburg is encountering declining labour productivity rates, with production falling from an historical base of some 1 000 000 oz of platinum a year to the 680 000 oz to 720 000 oz forecast for the current financial year ending June 30, 2018.

“Unfortunately, we’re now left with no further option in the prevailing operating environment but to consider further restructuring processes that may lead to a reduction in the number of employees,” Muller said in a release to Creamer Media’s Mining Weekly Online.

While 2 500 jobs could be affected in the near term, further optimisation processes may also be required in future to ensure the continued sustainability of the operation.

“It must be emphasised that no final decision has been taken as regards the proposed restructuring, and no final decision will be taken prior to full and proper consultation with affected employees, and their representatives, in compliance with the Labour Relations Act,” added Muller, who told Mining Weekly Online that important steps to effect greater strength of leadership within the Impala Rustenburg operation had already been taken.

Implats reported last week that it was in the first phase of the review of an intended restructuring of Rustenburg after its headline earnings per share plunged to a 137c a share loss in the 12 months to June 30.

Ongoing cost saving and optimisation initiatives had been implemented in an attempt to restore profitability and secure continued employment as far as possible.

A priority target of returning Impala to a cash neutral position by 2019 has now been set assuming the current low platinum price environment remains as is.

This incorporates an assessment of each shaft and production area and will result in a mining complex that is likely to be somewhat different to the large and intricate current operation and may lead to the disposal or suspensions or harvesting of marginal and lossmaking shafts.

Impala’s leadership has been strengthened and realigned to ensure that a fit for purpose team is in place to drive performance, to increase production volumes, and improve efficiencies and productivity.

On the cards is the rebuilding of the entire operating methodology and culture at Rustenburg, where delegation of authority and accountability to lower levels is anticipated.

Currently decision-making is seen as being excessively centralised, with the changes already undertaken giving rise to early signs of improvement.

The company, which is headed up by CEO and COO Ben Magara, will, therefore, implement further measures to ensure that its operations generate sufficient cash to support a sustainable business, it noted in a statement on Monday.

This follows the initial conclusion of an ongoing review of Lonmin’s operations, which has the primary objective of preserving value for shareholders and safeguarding the long-term interests of employees and all key stakeholders.

The operational review is focused on enhancing the cash produced by the business – from its operations and through releasing capital from those activities where the company is currently bearing the cost of excess capacity and unrealised development potential.

“The review is also designed to position the company to benefit from any future improvement in the platinum-group metals (PGM) pricing environment,” Lonmin stated.

The immediate results of the operational review include initiatives to generate cash through the monetisation of select Lonmin assets and to preserve cash by reducing fixed costs.

Lonmin plans to implement several measures, which will be subject to receiving the necessary consents and approvals.

The measures include pursuing all options to maximise cash from Lonmin’s high-quality downstream processing operations. Lonmin plans to achieve this through the sale of excess processing capacity of up to 500 000 oz/y of platinum.

“This would have the benefit not only of releasing capital for Lonmin, but would also allow other South African PGM producers who currently operate on a sale of concentrate basis to access the profit margin benefits of an integrated beneficiation model,” the company stated.

Lonmin will further implement a review of the company’s major development capital requirements over the next few years. In this regard, Lonmin will consider selling for cash or introducing joint venture partners into Limpopo and Akanani, together with exploring options to introduce funding partners into K4.

Meanwhile, despite a consistent strong performance from the Rowland shaft, Lonmin notes that its current capital position makes it challenging to fund the MK2 project, which is necessary to extend Rowland’s economic life.

While Lonmin believes that the MK2 project will be value-accretive, the company will explore options to introduce funding partners and preserve about 5 000 jobs.

Lonmin also aims to implement a reduction in yearly overhead costs by a minimum of R500-million by the end of the 2018 financial year. The substantial majority of overhead reductions will come from nonproduction central functions as the company seeks to right-size its overheads to its operations.

Lonmin will also continue to identify further overhead and cost savings.

While it is too early to define the ultimate effect of the operational review on the company, the overall aim remains for the business to be cash positive after capital investment.

Lonmin noted that further announcements will be made “as and when appropriate”.

Royal Bafokeng Platinum CEO Steve Phiri said on Tuesday that he was “very encouraged” by the stance taken the day before by the National Union of Mineworkers (NUM) and the ruling African National Congress (ANC).

“We can only improve the situation if we work together and not against each other,” Phiri outlined to Mining Weekly Online in an interview after the company reported a R31.9-million loss in the first six months of this year. (Also watch attached Creamer Media video).

“We’re very encouraged by the statements released by ANC yesterday and this morning, which raises serious concern about the damage Mining Charter Three does to the mining industry and the economy of this county.

“We hope that we’ll see something different in a few days, few weeks, few months to come,” said the head of the 52% black-community-owned Johannesburg Stock Exchange-listed platinum mining company.

On Monday, NUM expressed fears that the South African mining sector, which had already shed more than 80 000 jobs over the past five years, would shed tens of thousands more jobs and called for the resignation of Mineral Resources Minister Mosebenzi Zwane, citing a complete breakdown in relations.

Phiri described as “very encouraging” the supportive comments of ANC Secretary General Gwede Mantashe, who in an interview with Radio 702 host Xolani Gwala referred to the private sector, the government and the ANC as being economic partners.

LOSSMAKING PLATINUM SECTOR

In the tough economic environment which has resulted in 70% “or more” of the platinum industry being lossmaking, Royal Bafokeng Platinum has been forced to respond by discontinuing mining upper group two (UG2) reef at the Bafokeng Rasimone Platinum Mine’s (BRPM’s) South Shaft, restructuring to match to the declining South Shaft resource, lowering unit costs to below the consumer price index, increasing tonnes milled by 14.3% and holding down year-on-year unit costs at BRPM.

Capital expenditure (capex) at the Styldrift 1 expansion, on which R7.23-billion has been invested to date, has been tailored to a 150 000 t a month ramp-up in the last quarter of 2018.

Company funding has been bolstered by the raising of a R1.2-billion convertible bond and the concluding of debt facilities totalling R2-billion.

Against this arduous backdrop, Phiri, who leads a 52% black-owned company, has refused to mince his words in condemning South Africa’s legislative and mining policy environment.

“We certainly can do better without the value-destructive Mining Charter Three. How the industry is supposed to understand and comply with it defies any stretch of the imagination,” said Phiri, 61, a former public prosecutor, who decried the document as “shabbily drafted, confused and ambiguous”.

He reminded the government that many still toiling in the mining industry had also helped to transform the sector by playing key roles in the formulation of the Mineral and Petroleum Resources Development Act in 2002 and 2003 – “from nothingness, where the industry gave up private ownership of mineral rights, and shareholders sacrificed equity without any compulsion”.

The first and second mining charters also came about by participants willingly shedding value through negotiation.

He condemned those latecomers who now condemned such trailblazing transformers as being anti-transformational.

As a crucial Constitutional imperative, transformation should come by way of a charter that was realistic, achievable and sustainable and not something that caused economic downfall.

“Transformation should not, as a matter of principle, be used as a populist football. We should not produce an unrealistic and unachievable piece of work and sugar-coat it as transformation, when it is so bitter and unpalatable to the core.

“It will implode on us, certainly. The industry will fall flat, capital will be chased away and so will growth remain a myth. Jobs will be lost.

“We hope that, in the end, wisdom will prevail and a realistic charter, with realistic targets, will be achieved through honest and meaningful engagement,” he said.

STYLDRIFT PROJECT

Royal Bafokeng Platinum reported a 70% increase in tonnes delivered from Styldrift, an 8.9% improvement in tonnes milled per employee, a 9.4% increase in four-element (4E) metals in concentrate and zero fatalities in the six months to June 30.

The low price environment resulted in a 9.8% reduction in average rand revenue basket price, earnings before interest, taxes, depreciation and amortisation being cut by two-thirds to R100.4-million from R305.3-million in the same period last year, and headline earnings per share collapsing to 15.3c a share from 77.8c in the corresponding period of last year.

But despite the stringency, the company remained steadfast in spending R15.9-million in the half-year on its social and labour plan commitments, which was up on last year’s R13.8-million.

Moreover, 86.3% of its total discretionary procurement spend was with historically disadvantaged companies.

The closure of the nonprofitable South Shaft UG2 production sections and redeploying 60% of the UG2 mining crews to superior-margin Merensky at South and North shafts and UG2 production at North Shaft has enabled the company to maintain current levels of platinum group metals production but with the enhanced effect of the base metals revenue that accompanies Merensky production and optimised processing arrangements equating to
R37-million a year.

Net revenue decreased by 3.2% from R1 646.9-million in the first half of 2016 to R1 593.9-million for the first half of 2017.

The company’s gross profit margin reduced from 11.4% for the first six months of last year to 0.7% for the six months ended June 30 this year on the 3.2% decrease in net revenue and the 8.5% increase in total cost of sales.

Total capex for the period under review increased by 63.8% to R847-million on the first half of last year.

Replacement capex fell by R33-million to R10-million and expansion capex increased by 86.1% to R778-million on the acceleration of construction at the Styldrift I project.

Stay-in-business capex increased by 5.4% to R59-million.

The total mining scope of the BRPM Phase III replacement project has been completed with only construction activities related to services, conveyor belts and associated bulkheads on 14 and 15 levels remaining.

A technical planning review of the Phase III extraction schedule has indicated that these levels will only be required to come on line during the second quarter of 2019, allowing capex to be deferred to 2018 without any negative impact on extraction.

During the reporting period, a total of 3 328 m of capital development was completed on 600 and 642 levels of Styldrift I, with 238 000 t of ore being delivered to the concentrator at a built-up head grade of 2.53 g/t 4E.

In line with project execution resource requirements, there are 23 mining and construction crews operational on site.

MARKET REVIEW

The platinum price started the year close to $900/oz., rose to above $1 000/oz. in February, but subsequently weakened to end the first half not far above where it started the year. The rand remained relatively strong against the US dollar in the first half of 2017 at around R13.20. This led to platinum prices in rand terms dipping below R12 000/oz. on a number of occasions during the first half of 2017, to lows not seen since November 2015.

Platinum production is forecast to be 2.5% lower this year as both primary and secondary supply ease. Primary supply is estimated to be down 2% year-on-year on lower output from Southern Africa. Secondary supply is expected to contract as lower recycling of jewellery in China is likely to more than offset a modest recovery in auto catalyst recycling.

However, lacklustre platinum prices are reflecting limited buying by end-users as overall demand, excluding investment, is forecast to soften year-on-year.

Western Europe remains the largest diesel market, but diesel market share continues to decrease, particularly in the small car segment.

Diesel share in larger cars remains relatively stable, while in heavy-duty vehicles, diesel is currently the only viable option.

Purchasing of platinum by Chinese jewellery fabricators in platinum’s largest market has not improved from a weak 2016. Platinum trading on the Shanghai Gold Exchange in the first half of 2017 was a third lower than in the first half of 2016, although this reflects industrial as well as jewellery demand.

Investment demand has been steady so far this year with platinum exchange traded funds (ETFs) adding 83 000 oz in the first six months, resulting in global ETF holdings increasing to about 2.6-million ounces. Platinum bar purchases were low in the first quarter owing to the high platinum price. However, weaker prices during the second quarter lifted buying.

Overall, the industrial market balance is projected to be in a modest surplus in 2017. If the platinum price remained weak in the second half of the year this would raise the risk of closures of unprofitable mining areas which could move the market closer to balance.

Palladium started the year trading at $676/oz and although volatile, the price continued to trend higher through the first six months of the year. Temporary tightness in palladium ingot availability resulted in the price briefly pushing through $900/oz in June before it eased back to end the month at $842/oz, up 25% for the year to date.

Palladium demand is expected to be little changed in 2017 as a slight increase in auto catalyst demand is offset by small declines in jewellery and industrial usage.

The rhodium price has continued its recovery in 2017, rising 35% to $1 040/oz during the first half of the year. However, while the price may have improved, the market still remains well supplied. Removal of unprofitable ounces from the market could move the market close to balance or into slight deficit.

Mineral Resources Minister Mosebenzi Zwanehas given platinum major Lonmin the go-ahead to acquire Anglo American Platinum’s (Amplats) 42.5% stake in the Pandora platinum joint venture (JV) operation, which saves the 3 000 jobs that would have been lost had the operation been placed under care and maintenance.

Zwane granted consent for the cession of the right in terms of Section 11 of the Mineral and Petroleum Resources Development Act.

With Lonmin having acquired the remaining 7.5% stake in the Pandora platinum operation from Northam Platinum in May, this acquisition increases Lonmin’s ownership interest in the Pandora JV to 92.5%.

Before the acquisition, the Pandora JV was 50% held by Lonmin subsidiary Eastern Platinum, 42.5% by Amplats through Rustenburg Platinum and 7.5% by Northam, through Mvelaphanda Resources Proprietary.

“One of our primary considerations when assessing [Lonmin’s] application was how we were best going to prevent retrenchments at the time,” noted the Minister in a statement released Wednesday.

“We are indeed pleased that we have been able to save 3 000 jobs, particularly in the current global economic climate.”

Zwane added, however, that Lonmin had five days to issue the Department of Mineral Resources (DMR) with a plan on how it would address broad-based black economic-empowerment compliance at Pandora, as the DMR “cannot afford a situation where transformation is compromised”.

“We are a reasonable regulator and apply our laws consistently to all right-holders. We continue to appeal to right-holders to make use of our open-door policy and engage with us frankly and openly on issues pertaining to this critical sector of our economy. We will always put the interests of South Africa and its people first in all our deliberations,” concluded Zwane.

The Minister’s approval of Lonmin’s application to acquire Amplats’ stake in Pandora comes amidst his proposed moratorium on the granting or renewal of mining and prospecting rights, the granting of mining and prospecting rights renewals, the granting of applications for the transfer of mining and prospecting rights, and the sale and transfer of a majority shareholding in holders of these rights, which has been met with the contempt of the public and civil society organisations, who have dismissed the move as illegal, irrational and unreasonable.

Zwane has essentially proposed that these activities be restricted until the High Court delivers its judgement on the implementation of Mining Charter 3.

In the three months to June 30, platinum mining major Lonmin recorded lower unit costs and higher net cash on improved production and rising sales – but suffered two fatalities in a quarter when the overall injury level was on a firmly downward trajectory.

Having assumed direct hands-on COO control of all operations in addition to his chief executive role, Magara expressed “great regret” in having to report two fatalities in a period when the 12-month rolling safety lost-time injury frequency rate improved by 2% quarter-on-quarter.

The London- and Johannesburg-listed primary platinumproducer and refiner generated 84% of its tonnage from its Generation 2 shafts, where output was 9% higher at 2.2-million tonnes.

While the stronger rand cut 3% off the year-on-year basket price to R11 506 a platinum group metal (PGM) ounce, the improved mining performance lowered unit costs by 4.7% to R11 278/PGM ounce on a six element basis.

Gross cash increased to $236-million from $225-million quarter-on-quarter, when net cash rose to $86-million from $75-million.

Lonmin is proving that it is still able to deliver and aims to be “at least cash neutral”, Magara said in a release to Creamer Media’s Mining Weekly Online.

The deaths of both locomotive operator Simon Sibitaneand rail maintenance team leader Mangi Bunga occurred at Shaft 4B, causing its quarterly production to plummet by 26.5%.

“The five fatalities experienced during the first nine months are unacceptable. We’ll be holding a safety workshop with stakeholders this month as we continue to work with all stakeholders to identify and implement sustainableremedies,” said Magara.

MINING OPERATIONS

The Marikana mining operations, including Pandora, produced 2.7-million tonnes during the three months to June 30, an increase of 3.8% on the prior-year period.

In line with the group’s rationalisation of high-cost areas, production from the Generation 1 Hossy, Newman, W1, E1, E2, E3 and Pandora shafts of 431 000 t, was 18.1% lower than the prior-year period.

Operational flexibility was preserved with the immediately available ore reserve position of 20 months’ average production.

During his days as COO of New Denmark Colliery, Magara succeeded in propelling the then struggling coal operation on to a positive new trajectory that doubled its output.

A source of encouragement to him is that production is turning nicely upwards, buoyed by encouraging new cooperation between his company, the once-hostile Association of Mineworkers and Construction Union and the principal inspectorate of the Department of Mineral Resources, and platinum assets that he regards as the biggest and the best on the western limb of the Bushveld Complex.

JOHANNESBURG – The withdrawal of South Africa’s Anglo American Platinum (Amplats) from a platinum group metals (PGM) project in Brazil has opened the way for Jangada Mines to acquire the asset and head for the London Aim to raise an initial £2-million in equity capital to fund the project.

Jangada chairperson Brian McMaster has told the London Telegraph that South African supply is “only going to go one way” and that investors will benefit from Amplats walking away from $35-million worth of investment the Johannesburg Stock Exchange company has already made in the project.

Jangada is currently owned by McMaster and two partners, one of whom was the MD on the project under Amplats, says the report in the Telegraph, which speculates that Jangada could capitalise on the recent unrest in the South African mining industry, plus the onerous new government regulations and soaring costs.

The Brazilian deposits at surface are amenable to low-cost conventional opencast mining, with initial production targeted in the third quarter of 2018, says the company, which intends using the money it raises to fast-track the Pedra Branca exploration project in north eastern Brazil.

South Africa’s platinum industry, which has invariably kept competitors at bay through its dominance, is now opening the door wider for new entrants as it buckles under the strain of low prices.

The total Brazilian project area covers 55 000 ha and includes three mining licences and 44 exploration licences, with 55% of current compliant resources contained within the current mining licence area.

The project is on the highway from the port city of Fortalezaand has all the required energy, water, telephone and Internet access, Jangada says on its website.

Chrome, rhodium, nickel, copper and vanadium-titanium mineralisation have also been identified.

Strand Hanson is acting as nominated financial adviser and Beaufort Securities is broker to Jangada.

Meanwhile, in the US, South Africa’s Sibanye has already clinched a two-year wage agreement at its acquired Stillwater, the large North American palladium and platinum producer and recycler.

The agreement, reached with the United Steel Workers of America, International Union, the representative union at the Stillwater operations in Montana, involves an immediately effective 2% general wage increase for all job categories and a further 1% increase effective from the start of next year.

In the main commodity markets, nothing is doing better than palladium this year.

The metal is up 30%, beating 33 other raw materials, including lean hogs and aluminium, tracked by Bloomberg. On Friday, prices surged as much as 7.9% to a 16-year high of $928.36/oz as some traders were said to scramble to get hold of physical supplies.

Palladium, which is mainly used to curb harmful emissions from gasoline vehicles, has rallied on expectations that supply will lag demand for a sixth straight year. It’s now almost as expensive as platinum for the first time since 2001, helped by Volkswagen’s emissions scandal two years ago that has prompted consumers to switch from diesel to gasoline cars.

“The fundamentals in palladium are among the best in all the commodities,” said Rene Hochreiter, an analyst at Noah Capital Markets in Johannesburg. “It could easily overtake platinum in the near-term. It feels as if the rally has got legs.”

SUPPLY DEFICIT
Mine production hasn’t been able to keep up with usage since 2012, partly because of rising car sales and stricter emissions limits. While stockpiled metal probably helped feed consumer demand in recent years, that source of supply may now be running out, according to Caroline Bain, chief commodities economist at Capital Economics.

RUSH TO BUY
The futures market is signalling traders are rushing to buy metal. Palladium for June delivery in New York has become a lot more expensive than the March 2018 contract in recent weeks. That’s indicating there may be concerns about near-term supplies.

“It appears that there is a serious shortage of readily available physical bars for spot settlement,” said Brad Yates, head of trading for US gold refiner Elemetal.

PARITY TO PLATINUM
Palladium’s rally means it’s almost the same price as sister metal platinum, which is favoured in catalytic converters in diesel vehicles. But because the metals can be used interchangeably, analysts have said that some industrial consumers may consider switching from palladium into platinum.

NOT EVERYONE’S SO BULLISH
But exchange-traded fund investors aren’t as keen. Palladium assets are down about 50% from a peak in 2014, data compiled by Bloomberg show. While holdings have fallen this year, they’ve increased in gold, silver and platinum ETFs.

JOHANNESBURG – JSE-listed platinum and gold miner Sibanye on Wednesday received a Ba2 rating from Moody’s Investors Service with a stable outlook and a B+ rating with a positive outlook from Standard & Poor’s (S&P’s) Global Ratings.

In assigning the Ba2 corporate family rating to Sibanye, Moody’s noted that it reflected Sibanye’s solid business profile underpinned by diversified metal production revenues, as well as the company’s record of setting and sticking to conservative financial policies.

The ratings outlook assumes Sibanye will “deleverage as planned following the addition of the Stillwater acquisition debt and the successful integration of [its] new mining assets”.

S&P’s noted that the assigned B+ rating reflected its view that Sibanye would “generate positive discretionary cash flow after the Stillwater acquisition that should enable it to gradually reduce leverage in line with its stated financial policy”.

The ratings agency further outlined that the business risk profile assessment of Sibanye reflected a company with an ambitious growth strategy. “Its portfolio of assets is spread across the cost curve, with high exposure to labour-intensive South African mining operations, some of which are high cost and in need of restructuring,” it stated.

However, it added that Sibayne’s management team had a good record of cost reduction and reserve extension of its South African gold assets and, following the Stillwater acquisition, the company will rank as the world’s third-largest platinum and palladium producer and a top-ten gold producer, with a growing presence outside of its home market.

“We could revise the outlook to stable as a result of lower-than-expected metal prices, a stronger rand exchange rate, or unexpected operational issues that lead to weaker or more volatile earnings and cash flow than we anticipate in our base case,” it added.

Sibanye CEO Neal Froneman said the affirmative credit ratings endorsed the miner’s maturing business model and the value it created. “Refinancing the Stillwater acquisition bridge facility is a key focus area of ours and, hence, these ratings are a positive step forward in establishing an appropriate long-term capital structure,” he added.

Sibanye also announced it has mandated Citi, HSBC and Barclays, as global coordinators and book runners, as well as Credit Suisse and Standard Bank, as book runners, of a proposed $1-billion bond offering, the rating of which is expected to be in line with the newly obtained corporate ratings.

The proceeds of the issuance will be used to refinance part of the bridge loan facility obtained by Sibanye to finance the acquisition of Stillwater.

JOHANNESBURG – As total diamond jewellery demand increased marginally to $80-billion in 2016, demand from US consumers ticked up 4.4% to break through the $40-billion mark for the first time.

After recording the fifth consecutive year of growth, US consumers now accounted for roughly half of all diamond jewellery purchases globally – a level not seen since before the financial crisis – in a market that remained the fastest growing, industry insight data from De Beers Group showed.

“American consumers continue to express a strong desire for diamonds, but their purchasing habits are changing rapidly. While bridal diamond jewellery remains fundamental, we are seeing both single and married women buying for themselves more frequently and more purchases being made online. Meanwhile, products such as multi diamond jewellery are becoming more popular,” said De Beers CEO Bruce Cleaver.

The report showed that demand growth from the US, supported by job creation, wage growth and a strong stock market, had offset a contraction in India, resulting in global demand for diamond jewellery increasing marginally in 2016 to $80-billion.

“However, while US demand drove global growth in 2016, it is increasing demand from emerging markets that is behind the last five years being the strongest on record. Despite some markets facing challenging conditions last year, we see this trend continuing, with improvements in demand from China and India, in particular, emerging in 2017,” he highlighted.

Demand from Chinese consumers grew 0.6% in local currency and has continued to improve in early 2017, while demand from Indian consumers started to return to more normal levels in 2017, following an 8.8% contraction in local currency in 2016 on the back of the jewellers’ strike, demonetisation and exchange rates.

While 2016 demand from Japanese consumers declined 2.9% in local currency, the strength of the yen had pushed up demand by 8.1% in dollar terms.

OUTLOOK
Unpacking the outlook for 2017, De Beers pointed out that continued sales in the US, bolstered by the more encouraging demand trends in China and India, would continue to drive global diamond jewellery demand growth, albeit marginal, in 2017.

“While the US has seen slower gross domestic product (GDP) growth in the first quarter, which generally signals slower growth in diamond jewellery demand, the outlook for 2017 is for higher consumer confidence and GDP growth,” Cleaver added.

Retailers in China expect demand to continue to grow at a slightly faster rate, in local currency, while in India, the effect of demonetisation this year proved to be less severe than anticipated, with consumption returning to more normal levels in the first quarter.

The United States is wagging its finger at Zimbabwe, threatening to ratchet up sanctions over a plan to develop a platinum mine involving Russian and Zimbabwean companies.

According to NewZimbabwe.com, Washington has said it will accelerate sanctions imposed against Harare in 2003, due to the Robert Mugabe-led government’s closer ties with Russia over the US$3 billion Darwendale platinum project. The website bases its claim on Zimbabwe Herald columnist Nathaniel Manheru, who it says is President Mugabe’s spokesman George Charamba. The claim has not been verified by the U.S. Embassy in Harare.

The platinum mine is being developed by a company called Great Dyke Investments, composed of Zimbabwe’s Pen East Investments, and Afronet, a consortium of three Russian partners, according to NewZimbabwe.com.

“At full development in 2024, the mine will produce 800,000 platinum ounces, pushing Zimbabwe’s output over one million ounces, and create 8,000 jobs,” the online newspaper notes.

Since Russia annexed Crimea in March, Washington and the EU have sought to isolate and punish the Kremlin, by tightening restrictions on major Russian state banks and corporations. Senior Russian officials, separatist commanders and Russian firms accused of undermining Ukrainian sovereignty, have also been blacklisted.

The United States imposed sanctions against Zimbabwe in 2003 after accusing Mugabe of human rights abuses and electoral fraud. The country has the world’s second largest platinum reserves after South Africa.